ICANN close to becoming $200 million gift-giver

Remember how ICANN raised hundreds of millions of dollars auctioning off new gTLD contracts, with only the vaguest of ideas how to spend the cash? Well, it’s coming pretty close to figuring out where the money goes.

The GNSO Council approved a plan last Thursday that will turn ICANN into a giver of grants, with some $211 million at its initial disposal.

And the plan so far does not exclude ICANN itself for applying to use the funds.

The plan calls for the creation of a new Independent Project Applications Evaluation Panel, which would be charged with deciding whether to approve applications for this auction cash.

Each project would have to fit these criteria:

• Benefit the development, distribution, evolution and structures/projects that support the Internet’s unique identifier systems;
• Benefit capacity building and underserved populations, or;
• Benefit the open and interoperable Internet

Examples given include improving language services, providing PhD scholarships, and supporting TLD registries and registrars in the developing world.

The evaluation panel would be selected “based on their grant-making expertise, ability to demonstrate independence over time, and relevant knowledge.” Diversity would also be considered.

While existing ICANN community members would not be banned from being on the panel, it’s being strongly discouraged. The plan over and over again stresses how there must be rigorous conflict-of-interest rules in place.

What’s less clear right now is what role ICANN will play in the distribution of funds.

The Cross-Community Working Group that came up with the proposal offers three possible mechanisms, but there was no strong consensus on any of them.

The one being pushed, “Mechanism A”, would see ICANN org create a new department — potentially employing as many as 20 new staff — to oversee applications and the evaluation panel.

Mechanism B would see the same department created, but it would work with an existing independent non-profit third party.

Mechanism C would see the function offloaded to a newly created “ICANN Foundation”, but ICANN’s lawyers are not keen on this idea.

The Intellectual Property Constituency was the lone dissenting voice at Thursday’s GNSO Council vote. The IPC says that support for Mechanism A actually came from a minority of CCWG participants, depending on how you count the votes.

It thinks that ICANN should divorce itself as far as possible from the administration of funds, and that not to do so creates the “unreasonable risk” of ICANN being perceived as “self-dealing”.

But as the plan stands, ICANN is free too plunder the auction funds at will anyway. ICANN’s board of directors said as long ago as 2018:

ICANN maintains legal and fiduciary responsibility over the funds, and the directors and officers have an obligation to protect the organization through the use of available resources. In such a case, while ICANN would not be required to apply for the proceeds, the directors and officers would have a fiduciary obligation to use the funds to meet the organization’s obligations.

It already took $36 million from the auction proceeds to rebuild its reserve fund, which had been diminished by ICANN swelling its ranks and failing to predict the success of the new gTLD market.

The CCWG also failed to come to a consensus on whether ICANN or its constituent parts should be banned from formally applying for funds through the program.

Because the plan is a cross-community effort, it needs to be approved by all of ICANN’s supporting organizations and advisory committees before heading to the ICANN board for final approval.

There also looks to be huge amount of decision-making and implementation work to be done before ICANN puts its hand in its pocket for anyone.

How ICANN could spend its $240 million war chest

Schools, pHD students and standards groups could be among the beneficiaries of ICANN’s nearly quarter-billion-dollar new gTLD auction war chest.
But new gTLD registries hoping for to dip into the fund for marketing support are probably shit out of luck.
Those are among the preliminary conclusions of a volunteer working group that has been looking at how ICANN should spend its new gTLD program windfall.
Over 17 new gTLD auctions carried out by ICANN under its “last resort” contention resolution system, the total amount raised to date is $240,590,128.
This number could increase substantially, should still-contested strings such as .music and .gay go to last-resort auction rather than being settled privately.
Prices ranged from $1 for .webs to $135 million for .web.
ICANN has always said that the money would be held separate to its regular funding and eventually given to special projects and worthy causes.
Now, the Cross-Community Working Group on New gTLD Auction Proceeds has published its current, close-to-final preliminary thinking about which such causes should be eligible for the money, and which should not.
In a letter to ICANN (pdf), the CCWG lists 18 (currently hypothetical, yet oddly specific) example proposals for the use of auction funds, 17 of which it considers “consistent” with ICANN’s mission.
A 19th example, which would see money used to promote TLD diversity and “smells too much like marketing” according to some CCWG members, is still open for debate.
While the list of projects that could be approved for funding under the proposed regime is too long to republish here, it would for example include giving scholarships to pHD students researching internet infrastructure, funding internet security education in developing-world primary schools and internet-related disaster-recovery efforts in risk-prone regions.
The only area the CCWG appears to be reluctant to endorse funding is the case of commercial enterprises run by women and under-represented communities.
The full list can be downloaded here (pdf).
The CCWG hopes to publish its initial report for public comment not too long after ICANN 61 in March. Comment would then need to be incorporated into a final report and then ICANN would have to approve its recommendations and implement a process for actually distributing the funds.
Don’t expect any money to change hands in 2018, in other words.

Governments still split on ICANN accountability plan, but will not block it

The Governmental Advisory Committee failed to reach consensus on proposals to improve ICANN’s accountability, but has raised “no objection” to them going ahead as planned.
After burning the midnight oil in a tense series of meetings at ICANN 55 in Marrakech last night, the GAC finally agreed to the text of a letter that essentially approves the recommendations of a cross-community accountability working group.
The GAC said, in a letter (pdf) to leaders of the so-called CCWG:

While there are delegations that have expressed support for the proposal, there are other delegations that were not in a position to endorse the proposal as a whole.
In spite of this difference of opinions, the GAC has no objection to the transmission of the proposal to the ICANN Board.

This means that one of the barriers to accountability reform, which is inextricably linked to IANA’s transition away from US government oversight, has been lowered.
The GAC said it could not by consensus endorse the full suite of proposals, however.
The main sticking point was the CCWG’s recommendation 11, which essentially enshrines the GAC’s consensus-based decision-making rules in the ICANN bylaws.
A handful of governments — a bloc of South American nations, plus France and Portugal — are still not happy about this.
There is “no consensus” from the GAC on Recommendation 11, the GAC said.
There is also no consensus on the so-called “GAC carve-out” in Recommendations 1 and 2, which would limit the GAC’s ability to challenge ICANN board decisions alongside the rest of the community.
The accountability plan still needs to be formally endorsed by a couple more ICANN community groups, before it is submitted to the ICANN board for approval, which is expected to happen over the next 48 hours.

ALAC throws spanner in ICANN accountability discussions

The At-Large Advisory Committee has yanked backing for a key ICANN accountability proposal.
The ALAC, on of ICANN’s policy advisory groups, this afternoon voted unanimously “to withdraw support for the Membership model” at ICANN 54 in Dublin.
The Membership model is a proposal out of the Cross Community Working Group on Accountability (CCWG) that would change ICANN’s legal structure to one of formal membership, where a Sole Member gets legal rights to enforce accountability over the ICANN board of directors.
The model has some fierce support in the CCWG, but over the last few days in Dublin the group has started to explore the possibility of a “Designator” model instead.
That would be a weaker accountability model than one based on membership, but stronger than the “Multistakeholder Enforcement Mechanism” proposed by the ICANN board.
ALAC chair Alan Greenberg said in a statement to the CCWG mailing list:

In its formal response to the CCWG-Accountability proposal issued in August 2015, the ALAC said that it could support the model being proposed, but preferred something far less complex and lighter-weight, and that we saw no need for the level of enforceability that the proposal provided. Moreover, the ALAC had specific concerns with the budget veto and the apparent lack of participation of perhaps a majority of AC/SOs.
In light of the reconsideration of a designator model by the CCWG, along with the recommendations of the Saturday morning break-out sessions, the ALAC felt that a revised statement was in order. Accordingly we decided, by a unanimous vote of the 14 ALAC members present (with 1 not present), to withdraw support for the Membership model.
I want to make it clear that this is not a “red line” decision. Should a Membership model become one that is generally advocated by the CCWG, and supported by a supermajority of Board directors (who ultimately MUST support any changes that they will be called upon to approve, else they would be in violation of their fiduciary duty), then the ALAC reserves its right to support such a model.

The move revises the battle lines in the ongoing accountability debate. It’s no longer a simple case of CCWG versus ICANN board.
Dublin is a crunch time for the accountability proposals.
The clock is ticking — if the ICANN community cannot agree on a consensus proposal soon it risks delaying the transition of the IANA functions from US government oversight and possibly killing off the transition altogether.
Yet, while the CCWG is making steady progress cleaning up remaining areas of disagreement, the differences between itself and the board are still as sharp as ever.

ICANN on “knife edge” after accountability impasse

The ICANN board of directors and the community group tasked with improving its accountability have failed to come to a compromise over the future direction of the organization, despite an intense two-day argument at the weekend.
As the often fractious Los Angeles gathering drew to a close, ICANN chair Steve Crocker said that the board was sticking to its original position on how ICANN should be structured in future, apparently unmoved by opposing arguments.
Other directors later echoed that view.
The Cross Community Working Group on Accountability (CCWG) has proposed a raft of measures designed to ensure ICANN can be held to account in future if its board goes off the rails and starts behaving crazy.
Basically, it’s trying to find a back-stop to replace the US government, which intends to remove itself from stewardship of the DNS root zone next year.
A key proposal from the CCWG is that ICANN should be remade as a member organization, a specific type of legal structure under California law.
A Sole Member, governed by community members, would have to right to take ICANN to court to enforce its bylaws.
But the ICANN board thinks that’s too complicated, that it would replace the board with the Sole Member as the ultimate governing body of ICANN, and that it could lead to unintended consequences.
It’s suggested a replacement Multistakeholder Enforcement Model that would do away with the Member and replace it with a binding arbitration process.
Its model is a lot weaker than the one proposed by the CCWG.
Much of the LA meeting’s testing first day was taken up with discussion of the strengths and weaknesses of these two models.
The second day, in an effort to adopt a more collegial tone, attendees attempted to return to the basics of how decisions are made and challenged in ICANN.
The result was a discussion that dwelt slightly too long on technicalities like voting thresholds, committee make-ups and legal minutiae.
There seems to be a general consensus that the meeting didn’t accomplish much.
Towards the end of the first day, National Telecommunications and Information Administration chief Larry Stricking urged attendees to get their acts together and come up with something simple that had broad community support. He said:

At this point, we do not have a view that any particular approach is absolutely okay or is absolutely not okay. But what I can tell you is that the work that we need to see, the thoroughness, the detail, and I put this in the blog, it is not there yet. So that I don’t feel comfortable even taking what we saw in these reports and trying to opine on them because there are too many open questions

On Saturday, fellow government man Ira Magaziner, who was deeply involved with ICANN’s creation as a member of the Clinton administration, issued a stark warning.
“I think you can fail. And I think you’re right on a knife’s edge now as to whether you’ll succeed or fail,” he said.
He warned that the IANA transition is going to become a political football as the US presidential election enters its final year and unorthodox candidates (I think he means the Republican clown car) are putting forward “somewhat nationalistic” points of view.
“I think you have a limited amount of time to get this done and for the US government to consider it and pass it,” he said.
That basically means the transition has to happen before January 2017, when there’ll be a new president in the White House. If it’s a Republican, the chances of the transition going ahead get slimmer.
Sure enough, within 24 hours the first reports emerged that Republican hopeful Ted Cruz, backed up by a few other senators, is asking the Government Accountability Office whether it’s even within the power of the US executive to remove itself from the IANA process.
In a letter, Cruz asked:

1. Would the termination of the NTIA’s contract with ICANN cause Government property, of any kind, to be transferred to ICANN?
2. Is the authoritative root zone file, or other related or similar materials or information, United States government property?
3. If so, does the NTIA have the authority to transfer the root zone file or, other related materials or information to a non-federal entity?

If this kind of anti-transition sentiment catches popular opinion, you can guarantee other jingoistic candidates will fall in line.
So ICANN’s on the clock, racing the US political process. In Magaziner’s view, the meat of the disagreements needs to be resolved by the end of the Dublin meeting — three weeks from now — or not long thereafter.
He seems to be of the view that the CCWG has overreached its remit. He said:

The task of accountability that was assigned to this group was, as the chair said this morning, to replace the ultimate backstop of the US government with a community-based backstop. The committee was not charged to completely rewrite the way ICANN works. I’m sure ICANN can be improved and there ought to be an ongoing process to improve the way it works, but this particular committee and NTIA didn’t ask you to completely redo ICANN.

The LA meeting didn’t seem to help much in moving the accountability debate closer.
On Saturday afternoon, Crocker spoke to confirm that the board is sticking to its guns in opposing the Sole Member model.
“We certainly did not understand and don’t believe that creating a superstructure to replace them [the US government] in a corporate sense was intended, desired, needed, or appropriate,” he said.
“So in the comments that we submitted some time ago, we did represent a board position. We did a quick check this morning, and 100% agreement that what we said then still stands,” he said.
That’s a reference to the board feedback on the CCWG proposal submitted September 11.
Now, the CCWG has to figure out what to do before Dublin.
Currently, it’s combing through the scores of public comments submitted on its last draft proposals (probably something that should have happened earlier) in order to figure out exactly where everyone agrees and disagrees.
It seems ICANN 54, which starts October 16, will be dominated by this stuff.

US gov: we can’t support ICANN accountability plan

The US National Telecommunications and Information Administration has waded into the ICANN accountability debate, possibly muddying the waters in the process.
In a blog post last night, NTIA head Larry Strickling said that community proposals for enhancing accountability were not yet detailed enough, and had not reached the desired level of consensus, for the NTIA to support them.
He urged everyone involved to simplify the proposals and to work on areas where there is still confusion or disagreement.
The comments were directed at the Cross Community Working Group on Enhancing Accountability (CCWG), a diverse volunteer committee that has been tasked with coming up with ways to improve ICANN accountability after the US government severs formal oversight of the IANA functions.
That group spent a year coming up with a set of draft proposals, outlining measures such as stronger, harder-to-change bylaws and improvements to the Independent Review Process.
But the main organizational change it proposed is where the most conflict has emerged.
CCWG thinks the best way to give the community a way to enforce accountability is to change ICANN into a membership organization, a certain type of legal entity under California law.
It would have a Sole Member, a legal entity peopled by members of each part of the community, which would have to right to take ICANN to court to enforce its bylaws.
The ICANN board doesn’t dig this idea one bit. Its outside attorneys at Jones Day have counseled against such a move as untested, overly complex and potentially subject to capture.
On a recent three-hour teleconference, the board proposed the Sole Member model be replaced by a “Multistakeholder Enforcement Mechanism”.
The MEM would create a binding arbitration process — enforceable in California court — through which ICANN’s supporting organizations and advisory committees could gang up to challenge decisions that they believe go against ICANN’s Fundamental Bylaws.
Since this bombshell, a key question facing the CCWG has been: is the board’s view being informed primarily by its lawyers, or has Strickling been quietly raising NTIA concerns about the proposal via back-channels?
If it’s the former, the CCWG and its own outside counsel could robustly argue the community’s corner.
If it’s the latter, it’s pretty much back to the drawing board — because if the NTIA doesn’t like the plan, it won’t be approved.
Unfortunately, Strickling’s latest blog post avoids giving any straight answers, saying “it is not our role to substitute our judgment for that of the community”.
But his choice of language may suggest a degree of support for the board’s position.

As I stated in Argentina in June, provide us a plan that is as simple as possible but still meets our conditions and the community’s needs. Every day you take now to simplify the plan, resolve questions, and provide details will shorten the length of time it will take to implement the plan and increase the likelihood that the plan will preserve the security and stability of the Internet. Putting in the extra effort now to develop the best possible consensus plan should enhance the likelihood that the transition will be completed on a timely schedule.

The emphasis on “simplicity” could be read as coded support for the board, which has repeatedly said that it thinks the Sole Member model may be too complicated for the NTIA to swallow.
Both the board and Strickling’s latest post refer back to a speech he made in Buenos Aires in June, in which he said:

If a plan is too complex, it increases the likelihood there will be issues that emerge later. Unnecessary complexity increases the possibility that the community will be unable to identify and mitigate all the consequences of the plan. And a complex plan almost certainly will take longer to implement.

Strickling certainly knows that the board has been citing these comments in its objection to the Sole Member model, so the fact that he chose to repeat them may be indicative of which way he is leaning. Or maybe it isn’t.
Either way, I think it’s going to be tough for the CCWG to easily dismiss the board’s concerns.
CCWG members are currently on planes heading to ICANN headquarters in Los Angeles for a two-day face-to-face meeting at which the chairs “expect that a large portion of our time… will be reserved to answering the tough questions”.
Many believe that unless this meeting is extraordinarily successful, it’s going to be tough for an IANA transition proposal to be approved by the NTIA under the current US administration.

Anger as ICANN’s member flops before board

ICANN’s board of directors came to blows with its key accountability working group this week, over proposals that would give ICANN the community the right to sue ICANN the organization.
An extraordinary three-hour teleconference between the board and the Cross Community Working Group on Enhancing Accountability (CCWG) Wednesday night came across like some kind of weird, Orwellian, passive-aggressive piece of emotional domestic abuse.
The CCWG, a group of volunteers coming from all parts of the ICANN community, has created a set of proposals for improving ICANN’s accountability to the community as part of its transition process away from US government oversight.
The idea is to create sufficient accountability mechanisms so that if in future the entire ICANN board grows goatee beards and turns Eeevil, the community will still be able to hold them to their bylaws commitments.
The CCWG, following the advice of an independent law firm, decided that the best way to do this was to turn ICANN into a membership organization with a “Sole Member”.
This member would be a legal entity run by community members that would have the right under California law to sue ICANN if it ever failed to live up to its bylaws.
For example, if ICANN refused to implement the decisions of an Independent Review Panel, the member could seek to have the ruling enforced by a court.
This is just one of many proposals made by the CCWG currently open for public comment.
Highly unusually for a public comment period, the ICANN board is going to be a commenter in this case. While its comments have not been published yet, it has taken advice from its lawyers at Jones Day that may give an indication of how it is leaning.
Wednesday night’s call was designed to give the board the chance to bring its initial thinking to the CCWG.
Instead, it wound up being almost entirely about the proposed membership model and the board’s statements that while it supported the CCWG’s proposals 100% it also wanted them fundamentally rewritten.
The board wants the idea of a Sole Member model thrown out and replaced with a new arbitration process that would be legally enforceable in California courts.
So, instead of a legal-entity “member” suing ICANN, some as-yet unidentified community entity would take ICANN to arbitration. The decision of the arbitration panel could then be enforced by the courts if ICANN failed to abide by it.
When CCWG members asked who, in the absence of a legal entity, would take ICANN to arbitration and then sue it, the board had no answer. Instead, directors said the CCWG’s legal advisers should talk to Jones Day to hammer out the “technical” details.
Some members claimed that it would be “impossible” to give the community legal standing to sue ICANN without a membership model. Others said that the board’s 11th hour suggested rewrites would make it “impossible” to hit the deadline for a final proposal by the Dublin meeting next month.
At least a third of the 2-hour 47-minute call was wasted as the CCWG struggled to understand the doublespeak the board had brought into the discussion.
Directors continually insisted that they “completely supported” CCWG’s proposals on enforcement “without reservation”, while simultaneously saying the Sole Member model should be thrown out.
Half way through the call, CCWG co-chair Thomas Rickert reflected exasperation among members: “There is obviously difficulty to understand by many on this call how you fully support what we are doing while proposing something which appears like a complete rewrite.”
Shortly thereafter, Chehade responded:

Why don’t we just agree that we are agreeing with you that the community must be able to get enforcement in California courts, that we will ensure that they have the standing to do it without question. And if we are all in agreement that we are in agreement with each other let’s then let the technical people go solve this. If they call come back and tell us that frankly that advice was flawed, then let’s deal with it then in good faith. But that’s what we’re sharing with you.

Directors said that the proposed member model might have unintended consequences, and that the US government may not approve a proposal that overly complicates ICANN’s legal structure.
An hour later, the CCWG was still scratching its head, nerves were beginning to wear, and the tone was getting increasingly testy as the CCWG repeatedly asked the board to explain how it could express support and simultaneously propose an alternative solution.
“There is absolutely no new proposal,” Chehade said, eventually. “We are embracing your proposal and the objectives of the community. Please hear me on this. There is no new proposal.”
He said:

Take your work and break it down: board removal, standing reconsideration, enhancing – getting the IRP back on the track we set, you know, fundamental bylaw, binding arbitration or mechanisms of enforceability. All of the things you have come up with, we are accepting. So when your reaction to our two last hours is that we’re refusing to add any accountability, I don’t know how you come to that frankly…
you yourself in the proposal say that this proposal is not finished, it needs a lot of work. So what we’re saying to you is let’s take this proposal which is not finished and let’s figure out ways to make it real, and real in the next few weeks so we can move forward…
The only area where we are telling you we would like to propose a different mechanism to achieve the same goal is the enforceability.

The whole three hours reminded me of a nightmare-scenario interview where the interviewee has been media-trained up the wazoo and refuses to sway from a set of vaguely scripted talking points.
But which proposal is the right one for ICANN?
Beats me. What does seem quite clear to me is that the board and CCWG are at odds now, despite what ICANN says, and that the expected delivery of a final accountability proposal by Dublin is in serious doubt.
Following the call, ICANN chair Steve Crocker posted a blog post that sought to clarify the board’s position, characterizing it as agreement in principle but disagreement on implementation. He wrote:

We have suggestions on how these [CCWG proposals] could be operationalized. With regards to the mechanisms for community enforceability, where the current proposal still warrants much detail that may not be achievable we have a suggestion on how to deliver on it in a stable way, as increased enforceability must not open up questions of, for example, capture or diminishing of checks and balances.

The Wednesday meeting’s audio, transcript and other notes can all be found here.